Host: Robert Taylor, Business Development Director, Concept Resourcing
Joel Berwitz, Managing Consultant, CNNECT
Chris Hodgson, Co-CEO and Founder, OBT Advisory
Join our speakers with host Rob Taylor, as they share their PE strategy & exit experiences – the good, bad and the ugly.
The importance of due diligence within the first 12 months after investment for maximum return
Clear, consultary advice and guidance from tech security experts
The vital roles of technology, cyber security and integration
People, transformation & change - the key to managing customer experience and outcomes
Hodgson: So, let's face it, you sit there and watch the news, it's, it's all due and gloom. No one's got any money. Everything costs so much more, you know, no spend any money. But in terms of private equity investment, we're seeing the opposite. So we have to rewind. Remember there's a huge amount of capital there. These portfolio companies have made commitments to their investors that they will deploy it and they will get return. So actually what we're seeing is there's almost a scarcity of assets in certain segments within it.
Certainly in the UK, within two to five million EBITDA, is a sweet spot where everybody's looking for it. So the impact of that is it's keeping multiples really, really strong. There's a lot of dd, you know, these are big checks being written, so people. Wanting to make sure that the asset they get is what they think it is but if you've got a good business, there's some real money to be made at the moment.
Berwitz: I think interestingly, if we go back to the point at which a potential sale or is looking to happen by a founder - so a founder's looking at understanding their own business in some more depth - especially from our perspective, a technology standpoint, there is a high volume of investors and firms looking to be invested.
“The potential macroeconomic environment is driving the investments themselves of the portfolio companies to look more at operational efficiency rather than just pure bottom-line growth.”
1. Your leadership team's absolutely crucial.
You've got to lead everything you’ve got to represent. If you've built a strong team that can lead that business, that can execute on those plans, on that strategy, and you can prove that actually leads.
2. Systems in place
If you've got systems in there that you know are not right, get rid of them now because they will be picked up in due diligence. You will be marked down. You will lose value on them. If there's no way to rip it out, then make sure you are the one who's calling it out.
3. All about strategy
The third part is having a strategy in place. So your strategy covers your people, your business, your products, and services and having a proven track record of being able to deliver on it.
It doesn't have to be the most complicated strategy on the planet. Often simpler is better, but being able to show over time that these are the strategic decisions that we've made, these are the good and the bad, and this is how we've been able to grow from it, breeds confidence in you and the business.
Berwitz: The speed of execution on the strategy itself, there has to be a plan and it has got to lead to either growth or efficiencies, but we are used to seeing teams with inertia.
Either you need to bring new people in or somehow try and change the inertia culture, moving to something that moves relatively quickly. The inertia not only stops things happening but it also feeds throughout the rest of the organisation, people start to get disenfranchised with working in the same organisations I've done before.
So speed and culture - the last point is a technology focus. Today, cyber security is huge. It’s a really complex subject because depending on the team that you've got, the strategy that you are aligning to, and the industry that you're in, it means that there are various different angles to go in from a security perspective.
But ultimately, in order to get the exit when the due diligence comes, you have to be in a position where you are cyber-secure. To what degree depends on budgets and risk profile and the industry, etc. We find ourselves getting involved in conversations around security almost every day because of the complexity of the market, the different types of products, and the number of vendors out there.
What role do data & analytics play in the due diligence process?
Berwitz: The most topical conversation that we have at the moment is all around data and analytics and being able to take a founder-led organisation that goes through some form of event, inevitably then the amount of data that you have to produce is going to increase.
“So being able to extricate that data to bring it into a form where you can report on it in a clear way, not only provides the information that the investor is going to need, but it will also feed into your strategy.”
So actually bringing all that data together and being able to surface it is a really important part of the conversation now as well.
Berwitz: The reality is the multipliers are there. If you've got the right technology and you've got the right business, I don't think at any point is there a specific “right” time. There have been profitable businesses that are efficient and run well, but from an operational perspective they are not worth a great deal of money. So that’s a difficult one to answer.
Hodgson: There might be a ‘scarcity with assets’, because there's an awful lot of people looking. So they get picked-up very quickly. A lot of money was raised over the last few years. People forget about it because of Covid and we were all locked in our houses, but while we were all locked in our houses, PEs were very cleverly raising huge funds of billions of pounds.
Now they’ve got to put it into something - there's, there's definitely opportunity there.
However, you need to make sure you're in the right circles. If you’re getting wind of these opportunities to come up with, you should be working with corporate finance. They find these opportunities. They represent people every day. So build relationships with corporate finance.
About the Speakers:
Robert Taylor, Business Development Director, Concept Resourcing
Rob has been at Concept for over 20 years, supporting the growth of a start-up recruitment agency to the PE-backed leading consultancies to some of the UK’s top technology and engineering firms. Concept Resourcing provide a robust and scalable resourcing partnership to fast-growing and hypergrowth business that receive financial investment by Private Equity and Venture Capitalist funding - partnering with the technology business directly or PE/ VC firm supporting their portfolio of clients.
Joel Berwitz, Managing Consultant, CNNECT
CNNECT are a team of technology advisors who help customers with their cloud, collaboration and cyber projects. CNNECT help with professional services, products and software. Most importantly, they help to speed up the time it takes to reach a great outcome.
CNNECT empowers IT leaders and departments to accelerate the value of their technology investments by advising them on the service providers that deliver the most relevant capabilities to their organisation.
Chris Hodgson, Co-CEO and Founder, OBT Advisory
OBT is a boutique mid-market advisory firm, offering consultancy services to businesses looking to make transformational events happen. They're strategic operators focused on outcomes, and the journey to achieving those outcomes. OBT help businesses with four key types of transformational events - business transformation strategies, pivoting product portfolios, M&A and exit events. With over 40 years combined experience they are experts in business transformation strategies, pivoting product portfolios, M&A and exit events.
Concept provides a robust and scalable resourcing partnership to fast-growing and hypergrowth business that receive financial investment by Private Equity and Venture Capitalist funding. Partnering with the technology business directly or PE/ VC firm supporting their portfolio of clients.
Building trust and relationships with your executive team to help de-risk the investment and help you identify talent at all levels, ensuring grow and success. We understand the need to “get it right” the first time and the detrimental effect of hiring badly. We work with PE firms in the due diligence phase, the initial investment and throughout the investment's lifecycle. Briefly, our service proposition is via the PE/ VC house or directly with their portfolio of clients to help them identify solutions to current or future gaps and risks to their investments. Our target market in this space is c£20 million - £150 million revenue business that is scaling based on organic, acquisitions or major £ investment over an investment life cycle.
Contact Robert Taylor today to discuss how we can connect you with PE-backed business leaders in the technology space.
07968 193 237